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Paterson was unaware of the earth quake. (John Carl D'Annibale / Times Union)

Paterson was unaware of the earth quake. (John Carl D'Annibale / Times Union)

Legislative leaders met with Gov. David Paterson to consider taxes to bridge the state’s budget deficit.

“They have some proposals on the table. We’re reviewing them, and frankly they don’t sound bad,” Paterson said after the 37-minute closed-door session. “It’s not really formal yet…obviously conversations about different ways to do a sales tax and that kind of thing.”

Paterson was asked whether it would be a tax on articles of clothing, and said “I’m not going to go through this piece by piece.”

“One of the concerns that I did express this morning is, we have counted into the budget $1 billion of Medicaid revenue. And I think it’s clear that that is not something that we can rely on. There are conversations now about lowering that amount – we might receive at least $200 million less than we thought we were going to get, if we get any at all,” Paterson said. “So one of the issues I raised with the leaders, which I’ve been raising for the past few weeks, is, can we responsibly count that money toward deficit reduction? In fact, all that money may not be there. So I’ve asked them to think about that money and come back to me with suggestions.”

“I think taxes and fees would [bridge that gap], but what I’ve been trying to do all along is stay generally with the plan that I issued in January. It doesn’t call for a great amount of taxes and fees, and it obviously doesn’t call for any explicit borrowing,” Paterson said.

Assembly Speaker Sheldon Silver said only that “we are talking about a variety of things that will get us to close the gap in this budget.”

“We will give you all of the examples in the very near future,” he added.

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Capitol Confidential gathers the best coverage of New York politics and puts it all together. Each section - Capitol, The State Worker, New York on the Potomac, and Voices - represents a unique facet of the political scene. The Capitol section features coverage from the Times Union Capitol bureau. The State Worker is dedicated to state worker issues. New York on the Potomac offers news of interest to New Yorkers from Washington. And Voices features the best of everything else, pointing you to columnists and bloggers from across the Web.